Premier League wages soar as agents paid £66 million

Premier League clubs paid agents £66 million in fees in the 2007-08 season as
transfer spending in England's elite league reached a record level.

Happy days: high earners Frank Lampard and John TerryPhoto: REUTERS

By Paul Kelso

6:30AM BST 04 Jun 2009

Accountants Deloitte estimate that the middlemen received around 10 per cent of Premier League gross transfer spending, which increased by 35 per cent to £664m in the season before last. Football League clubs paid agents a further £11m.

The substantial hike in Premier League transfer spending was matched by a rise in player wages across the league, which exceeded £1 billion for the first time.

The increase in player wages, up 23 per cent to £1.2bn, almost exactly mirrored the increase in revenue received by clubs in the first season of a new three-year TV deal worth £2.7bn in domestic and international rights.

Total club revenue from all sources rose to £1.932bn in 2007-08, up 26 per cent from the £1.5bn received in 2006-07. Net debt in the Premier League also grew to £3.2bn, with the 'big four' responsible for two-thirds of that.

The clubs with the largest wage bills, Chelsea, Manchester United, Arsenal and Liverpool, are also the most dominant. Chelsea were the biggest payers in the league with a total wage bill of £172m, £51m more than second-placed United, who spent £121m.

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"If there could be some collective restraint across the board all clubs would be able to peg back spending a bit, and players would still receive handsome salaries," said Paul Rawnsley, of Deloitte's sports business unit.

"That would allow a little more profitability within clubs. Likewise if there was restraint in agents fees it would allow the clubs to pay players a little more or invest elsewhere. £66m is a big number."

Despite earning more money than ever – and revenue is forecast to have exceeded £2bn last season– Premier League clubs still struggle to turn a profit. Just 11 of the 20 did so in 2007-08, with total operating profits standing at just £185m.

The brake on profits was largely due to rises in operating costs other than wages. Deloitte warn that clubs will have to work hard to keep these costs down as revenue is unlikely to grow appreciably in coming seasons because of the recession.

"[Controlling costs] appears to present a real challenge for clubs to address," the report states. "Revenue growth will... be relatively slow in the next few years. Meanwhile wage costs are unlikely to decline as a proportion of revenues

Deloitte attribute the Premier League's relatively modest profitability to the unique nature of a league in which playing talent is at a premium. "Despite the increases in revenue the fiercely competitive nature of the league has seen profits quickly competed away with operating margins falling from 16% to below 10%.

"For many owners Premier League clubs represent 'trophy assets' with the potential to deliver a long-term return but which at best break even annually, rather than a cash cow delivering an ongoing 'dividend'," said Dan Jones, head of Deloitte's sports business unit.

Meanwhile, Fifa has revealed that just a quarter of transfers are being carried out by officially-sanctioned dealers. The majority of transfer deals involve intermediaries, lawyers or family members.